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Where Taxpayers and Advisers Meet

Available Allowance

GANDONAS22
Posts:18
Joined:Sat Jan 19, 2019 12:06 pm
Available Allowance

Postby GANDONAS22 » Mon Mar 01, 2021 9:32 pm

Our business is due to close on May 2021 and we have a tax liability of £11,200 estimated for 20/21 tax year.
On cessation we expect to have a balancing allowance of £10,000.
As we do not receive any WDA in the final year my question is
Can this available allowance be carried back and offset against the £11,200 liability ?
Many Thanks
G

robbob
Posts:3149
Joined:Wed Aug 06, 2008 4:01 pm

Re: Available Allowance

Postby robbob » Tue Mar 02, 2021 10:03 am

Practicably speaking the balancing allowance you get takes account of the WDA's you would have normally claimed but don't - Ie if you had claimed WDA's your balancing charge would have been less - this will be a zero numbers game with overall claim agaisnt profits reflecting reduction in value of that asset of time buisness had that asset.

GANDONAS22
Posts:18
Joined:Sat Jan 19, 2019 12:06 pm

Re: Available Allowance

Postby GANDONAS22 » Tue Mar 02, 2021 11:49 am

Thanks , I cant quite follow " claim against profits reflecting reduction in value of that asset of time business had that asset. "

I suppose I am asking will the allowance negate the liability ?

Thanks again

G

robbob
Posts:3149
Joined:Wed Aug 06, 2008 4:01 pm

Re: Available Allowance

Postby robbob » Tue Mar 02, 2021 5:19 pm

Thanks , I cant quite follow " claim against profits reflecting reduction in value of that asset of time business had that asset. "
Sorry probably poorly worded on my part - basically if you bought asset for 10k and this asset is removed at market value of £2k when you cease - then the sum of capital allowances claimed for this asset (over all years) should be £8k!!!


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